The financial crisis revealed the most significant danger of modern government: it homogenizes the behavior of the people subject to its regulations. If the regulators make a mistake, the entire system is at risk, because everyone has had to behave in line with the regulators' fallible opinions. In this light, the supreme advantage of capitalism is that it allows the heterogeneous opinions of fallible people to compete with each other, eliminating mistakes over time. This is the best solution available to ubiquitous human error. Jeffrey Friedman and Wladimir Kraus argue that the financial crisis exemplified the danger of regulatory homogenization. Banking regulations penalized banks that did not buy mortgage-backed securities rated AAA. For that reason, a housing crisis turned into a banking crisis. Even now, banking regulations are spawning a second financial crisis in Europe, because the same set of rules penalizes banks that lend to businesses or consumers instead of governments. Please join us for an all too timely examination of the unintended – and sometimes disastrous – effects of regulation on complex economies.